Measuring Efficiency of Hydropower Plants in Nepal Using Data Envelopment Analysis

This paper evaluates the performance of hydropower plants of Nepal Electricity Authority (NEA) using data envelopment analysis (DEA). Input-oriented DEA models are used for various efficiency measurements. DEA models are solved using general algebraic modeling systems (GAMS). The average technical efficiency of hydropower plants of NEA is found to be around 74%, whereas the scale efficiency of the plants is found to be 71%. Similarly, average overall efficiency is found to be around 50%. Classification based on the sensitivity analysis shows that around 80% of hydropower plants fall under the category of distinctly inefficient plants with base technical efficiency scores below 90%. There are a few hydropower plants like Kaligandaki and Sundarijal that are found to be robustly efficient with technical efficiency scores of 100% for most of the conditions